Today the U.S. Equal Employment Opportunity Commission published its long awaited FY 2012 Performance and Accountability Report. The Report was posted on-line at the EEOC’s website along with a press release. The EEOC’s fiscal year ends on September 30th each year, and the Report details activities from October 1, 2011 to September 30, 2012. The Report is a must-read for all employers not only for the story told by last year’s raw numbers, but also for the foreshadowing of things to come – telltale signs illustrated by both the year-end numbers and the EEOC’s emphasis on its three overarching strategic objectives.

In response to mounting political pressure and last year’s budget cuts, the EEOC developed a plan “to make meaningful progress toward a more strategic and focused use” of resources. In February 2012, the Commission proposed a new Strategic Plan for Fiscal Years 2012-2016, which established three objectives: (1) combating employment discrimination through strategic law enforcement; (2) preventing employment discrimination through education and outreach; and (3) delivering excellent and consistent service through a skilled and diverse workforce and effective systems. This draft Strategic Plan was later refined in September 2012. However, this year’s Report is framed largely in how the EEOC has made progress in achieving these three objectives, generally, and its strides toward strategic enforcement, specifically.

In touting its strategic enforcement successes, the Report emphasized the EEOC’s record-high recovery of $365.4 million through the administrative process in FY 2012, an increase by $700,000 from what it recovered for parties it represented in FY 2011. The EEOC also noted an overall reduction in the pending administrative charge inventory by over nine percent, marking the second consecutive year of significant reduction in inventory since FY 2002.

One of the most striking numbers in the Report, however, is the precipitous drop in the number of lawsuits filed in FY 2012. Although we first reported this significant drop in filings here, the Report confirms that the EEOC filed only 122 lawsuits in FY 2012, down from 261 merits lawsuits in FY 2011. Although the EEOC has characterized its efforts as “enforcing the law more effectively” in furtherance of its strategic objectives, these numbers also illustrate a response to growing criticism by federal courts over the EEOC’s litigation tactics. Over the course of the past year, the EEOC received some stunning rebukes from federal courts all over the country, from New Jersey to Michigan to Texas – some have stuck, while others have not. But regardless, the EEOC has been required to defend its practices on a nationwide scale, at the District Court level and beyond. As such, time and resources have drawn away from the EEOC’s capabilities to actually pursue the merits of the cases it has filed.

Moreover, the decrease in overall lawsuits demonstrates the EEOC’s ever-increasing focus on pursuing systemic discrimination lawsuits. Under the new Strategic Plan, “systemic cases” are defined as “pattern or practice, policy, or class cases where the alleged discrimination has a broad impact on an industry, occupation, business, or geographic area.” Although at least one District Court has attempted to narrow the EEOC’s discretion to launch such broad investigations on its own accord, the Report acknowledges that its Performance Measure in this area incentivizes the agency to conduct systemic investigations whenever it finds evidence of such potential widespread discriminatory practices.

By the end of FY 2012, systemic suits accounted for 20% of all of its active merits suits, the largest proportion on the EEOC’s active docket since it began tracking in FY 2006. Under the new Strategic Plan, the EEOC anticipates that systemic filings will account for 22% to 24% of all pending lawsuits by FY 2016. Indeed, over the last year, the EEOC filed 10 systemic discrimination lawsuits, compromising 8% of all merits findings. The Commission also resolved 240 systemic investigations, which resulted in monetary damages of $36.2 million for 3,813 individuals, and 21 systemic cases, which resulted in multiple million dollar recoveries. In devoting significant proportion of its resources to a smaller number of cases with potentially devastating damages, the EEOC has clearly focused on getting the most proverbial “bang for its buck.”

Finally, the Report indicates that the EEOC is making good on its promises to focus enforcement efforts on the “vulnerable worker and underserved communities.” Not only has the EEOC identified approximately 90 significant partnerships in this area, with goals to increase such partnerships by 10% in both FY 2012 and FY 2014, but also the litigation data demonstrates a marked increase in the percentage of filings under the ADA in FY 2012 — approximately 37% — in comparison to the approximately 31% filed in FY 2011.

In light of the numbers released today, employers facing pending charges or complaints should be conscious of the EEOC’s focus on resolving its inventory of charges and litigation. When the EEOC files suit, it has signaled that it intends to do so more aggressively and more thoughtfully. Moreover, the EEOC’s actions demonstrate that it is pointedly and increasingly focused on large systemic discrimination complaints, that could result in large money recoveries. Employers should expect the EEOC to direct even more resources, in terms of both time and money, at these large-scale cases, and to look for more opportunities to file even more of these cases in the coming year.

Readers can also find this post on our Workplace Class Action blog here.